A call by Peter Hain, the Prime Minister's chief negotiator on the convention drafting the constitution, for next year's European elections to be regarded as a referendum were disowned by Downing Street. Mr Hain was then forced to perform an embarrassing about-turn.

The row erupted as it emerged that incorporation of the EU's Charter of Fundamental Rights in the constitution would give Euro-judges the final say over large areas of British life.

Speaking on BBC Radio 4's Today programme, Mr Hain pointed out that the constitution would be finalised around the date of the European elections, on June 10 next year.

"I would be quite happy to fight the next European elections on a Labour platform endorsing this treaty, and the Conservatives can oppose it, and then the people will decide," he said.

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Michael Ancram, Tory foreign affairs spokesman, accused Mr Hain of trying to secure the public's support for the constitution by "sleight of hand" instead of allowing them a genuine voice.

After talks with Mr Blair at Chequers, Mr Hain beat a hasty retreat, saying he had been "misinterpreted" and it was "absurd" to suggest that next year's European elections would be a substitute for a referendum.

"People will be voting on a whole range of issues, especially when the local government elections could well be on the same day," he said.

The Conservatives accused Mr Hain of "panicking" after being carpeted by Mr Blair. Mr Ancram said Mr Hain's action in disowning his own words "should be a warning to the British people not to put any store by what he says".

Mr Hain's comments were seen at Westminster as a gaffe. He appeared to be conceding the principle of a popular vote on the constitution - despite the Government's insistence that it was a matter for Parliament, not the people, to decide.

His words also alarmed Downing Street because the Labour Party is unlikely to do well in the next round of mid-term elections. It suffered a heavy defeat during the last European elections in 1999.

Downing Street denied that Mr Hain had been rebuked by the Prime Minister for his comments. But officials delivered a sharp put-down when they said it was "incorrect" to suggest that the European elections would effectively be a referendum on the proposed constitution.

"We can see why it may be interpreted in that way, but actually he was just saying that people will make their views clear next year as to the course of action we have been taking," said a spokesman.

Mr Hain's earlier claim that the constitution was a "tidying-up exercise" was undermined when the latest sections of the document were unveiled in Brussels.

It proposes a justice department known as Eurojust with powers to launch investigations and paves the way for a European Public Prosecutor to crack down on serious cross-border crimes.

The new articles, which bring the EU's justice policy under the full control of the European Court for the first time, establish a common policy on asylum and a common immigration policy.

The veto wielded by nation states, including Britain, would also be whittled down in the highly sensitive areas of social security, workers' rights and collective bargaining.

The Government served notice that it would block the proposal to give the EU the power to set workers' rights in Britain, including giving European judges the final say on the right to strike.

Despite assurances to Mr Blair by M Giscard d'Estaing, the head of the drafting convention, that there would be no loss of the veto on tax policy, the latest text establishes majority voting in fighting tax fraud. A British official said it was the beginning of a "slippery slope" and would have to be removed.